NCBA Bank Tanzania Limited vs John Barakael Mushi & Others (Civil Appeal No. 42 of 2024) [2025] TZCA 874 (25 August 2025)

IN THE COURT OF APPEAL OF TANZANIA AT DODOMA (CORAM: MWANDAMBO. J.A.. MWAMPASHI. J.A. And MflFYEKWA. J.A^ CIVIL APPEAL NO. 42 OF 2024 NCBA BANK TANZANIA LIMITED ............................. .................APPELLANT VERSUS JOHN BARAKAEL MUSHI.............. ........ .............................. jst RESPONDENT ALLIANCE INSURANCE CORPORATION LTD ...................... 2 nd RESPONDENT VICTORIA INSURANCE BROKERS LTD ............................... 3 R D RESPONDENT [Appeal from the decision of the High Court of Tanzania (Commercial Division) at Dar es Salaam] (Nanqela. 3.^ dated the 10 th day of November, 2023 in Commercial Case No. 29 of 707? JUDGMENT OF THE COURT 1s t & 25th August, 2025 MWAMPASHI. J.A: This appeal seeks to challenge the decision of the High Court of Tanzania (Commercial Division) at Dar es Salaam (the High Court) in Commercial Case No. 29 of 2023 dated 10.11.2023. In the said impugned decision, the High Court concluded that the appellant was grossly negligent for failing to pay to the 2n d respondent the requisite insurance premium intended to cover the 1s t respondent's two motor vehicles as agreed in an Insurance Premium Finance Agreement (the IPFA). For that reason, the appellant was found liable for the loss suffered by the 1s t respondent

following the collision of his two motor vehicles that had been involved in an accident. Amongst other reliefs, it was decreed that the 1s t respondent should be paid by the appellant TZS. 120,000,000.00 being the value of the two motor vehicles, The relevant facts giving rise to the suit before the High Court and from which the impugned decision resulted are not complex. On 20.01.2021, the 1s t respondent approached the 3r d respondent, an insurance broker, for insurance cover of his two motor vehicles with Reg. Nos T606 DPS and T354 DNX valued at TZS. 120,000,000.00. It turned out that a premium to the tune of TZS. 11,676,336.00 was required for that purpose. As the 1s t respondent had no such amount, he was introduced by the 3r d respondent to the appellant where he applied and was granted a loan for payment of the relevant insurance premium. In that regard, on the same day, that is, 20.01.2021, through the IPFA to which the appellant, the 1s t and 2n d respondents were the parties, the appellant agreed and committed herself to pay the required premium to the 2n d respondent. It was a condition precedent that, before issuance of insurance cover notes, the 1s t respondent had to issue ten post-dated cheques valued at TZS. 1,167,634.00 each in favour of the appellant, as security and re-payment of the premium which the appellant was to pay to the 2n d respondent. In compliance with the condition, the 1s t respondent

issued ten post-dated cheques on the same date, that is, 20.01.2021. Thereafter, on 21.01.2021, the 3r d respondent, purportedly acting for the 2n d respondent, issued insurance cover notes Nos. 6235 and 6237 to the 1s t respondent. Just four days after the issuance of the insurance cover notes, on 25.01.2021, the 1s t respondent's motor vehicles collided to each other. Apart from the motor vehicles being damaged, one of the drivers died and the 1s t respondent had to part with TZS. 450,000.00 which was paid to TANROADS as fine for the damaged kerbstone and TZS. 3,000,000.00 as towering costs. It was after the 2n d respondent had paid no attention to the Motor Vehicle Claim Form placed before her by the 1s t respondent, when the 1s t respondent sued her with the 2n d and 3r d respondents claiming against them jointly and severally for:

1. Payment o f TZS. 123,450,000.00 as specific damages.
2. Interest on the decretal sum at court's rate from the date o f the judgment to the fu llpayment.
3. General damages.
4. Costs.

For a better appreciation of what was the nature of the 1s t respondents claims before the High Court, it is significant to reproduce paragraph 5 of the plaint thus: 5. That the Plaintiff's claims jointiy and severally against the Defendants is for payment o f Tzs. 123, 450,000.00 being specific damages for two motor vehicles with registration No. T606DPS and T354DNX SCANIA insured with the 1st Defendant and costs for TANROADS fine, towering fee. The Plaintiffalso claims for genera! damages for loss o f income and parking fee involved\ [Emphasis added] In their respective written statements of defence, the appellant, the 2n d and 3r d respondents denied the 1s t respondent's claims. For her part, the 2n d respondent stated that the claims by the 1s t respondent were baseless because no insurance contract between her and the 1s t respondent was created as no premium was paid to that effect. In her defence, the 2n d respondent also disowned the insurance cover notes issued by the 3r d respondent. While the 3r d respondent's defence to the claims was a total evasive denial, the appellant's defence was to the effect that the claims were baseless and not tenable. She stated that the IPFA was not enforceable and binding on her for want of her endorsement. Despite the above defences, particularly that his claims were baseless

because there existed no insurance contract, the 1s t respondent filed no reply in response to the said defence. In essence by not filing a reply to the written statements of defence, the 1s t respondent stuck to his guns that the insurance contract existed and that his two motor vehicles were insured as pleaded in the plaint. Based on the pleadings as shown above, the High Court, at page 288 of the record of appeal, framed and recorded the following four issues for determination:

1. Whether the Insurance Premium Finance Agreement dated 20/01/2021 between the Plaintiff and the 1st and ? d Defendants was properly executed by a il parties and thus binding.
2. Whether the Motor Vehicles with registration No. T.606 DPS and T.354 DNX make- Scania were insured by the 1st Defendant at the time o f accident on 25/01/2021.
3. Whether the Cover Note/Risk Note No. 6235 and 6237 with stickers number9657304 and9657306issued to the plaintiff were valid at the time o f accident.
4. To what reliefs are the parties entitled. In view of the above framed issues, the parties presented their respective evidence. On 11.07.2023, after the parties had dosed their respective cases, as it is reflected at page 352 of the record of appeal, the High Court came to the view that, based on the presented evidence and

for a better determination of the matter before it, a new issue had to be added in terms of Order XIV rule 5 (1) of the Civil Procedure Code, Cap. 33 (the CPC). The additional issue, which would become the 2n d issue, was to the following effect: "If the 1st issue is to be responded to negatively,\ who between the defendants should be heid accountable for any negligent conduct which made the Plaintiff to suffer loss due to the non-payment o f the Premium." After the additional issue had been framed, the counsel for the parties filed their respective final submissions before the High Court composed its judgment in which the 1s t issue was determined in the affirmative. It was found that, even though the appellant did not sign the IPFA, her conducts including the fact that she accepted the 1s t respondent's post-dated cheques and deducted T7S. 1,167,632.00 from the 1s t respondent's account being the first instalment repayment of the loan she had agreed to grant to the 1s t respondent, meant that she was bound by the IPFA. As for the 2n d additional issue which turned out to be decisive, it was found that the appellant was grossly negligent in her conduct and was thus responsible for the 1s t respondent's claims. On the 3rd issue, it was found that the appellant's two motor vehicles were not insured because the insurance premium was not paid to the 2n d respondent by the appellant

in accordance with the IPFA. On the 4th issue, the cover notes were found to have been invalid. As alluded to earlier, the appellant was found liable and was thus ordered to pay to the 1s t respondent TZS. 120,000,000.00 being the value of the two motor vehicles and TZS. 450,000.00 being the amount the 1s t respondent had paid to TAN ROADS. The 1s t respondent was also awarded interest on the decretal sum at the court's rate of 7% from the date of the judgment to the date the decretal amount is paid in full, TZS. 3,000,000.00 as general damages and costs of the suit. Aggrieved, the appellant filed the instant appeal on the following grounds:

1. The learned trialJudge erred in law and fact in holding that the appellant should shoulder all the liabilities which the 2n d respondent could have shouldered. In doing so the learned Judge erred in failing to note that; (3) The relevantpremium to validate the insurance cover/po/icy had not been paid in fullat the time o fpolicy inception as required by the law. (b) The Insurance Premium Finance Agreement was null and void for agreeing to pay the premium in instalments contrary to the requirement o f the law.

2. Upon finding that the insurance cover [was] void unless premium is paid before the inception, the /earned trial Judge erred in failing to rule and hold that the instalment amount agreed to be paid under the Insurance Premium Finance Agreement could not have validated the insurance cover and therefore no cover could have been created at the time o f occurrence o f the insured event even if the relevantpost-dated cheque had been cashed orpaid to the [appellant].

3. The learned trialJudge erred in law and fact in framing and determining an issue on the alleged negligent conduct o f the appellant or the J d respondent. In doing so■ , the learned Judge erred in failing to note that the issue did not arise from the pleadings by the parties.

4. Upon accepting that in motor vehicles insurance the cover note must be issued against payment o f premium, the learned Judge erred in iaw and fact in failing to hold that it is the 3rd respondent who was negligent for issuing the cover note without ensuring that the requiredpremium had been fuify paid.

5. Upon accepting that the Insurance Premium Finance Agreement could only be binding and enforceable upon being signed by all the parties, the learned Judge erred in iaw and fact by holding that the binding nature o f the Agreement could be inferred from the conduct o f the appellant. In doing so the learned Judge erred in failing to note that; 8

(a) The alleged encashment o f the post-dated cheque by the appellant had occurred well after the occurrence o f the insured event and therefore no insurance contract could have been concluded at that stage. (b) The 1st respondent had no basis to believe that the motor vehicles had been insured for the occurrence by conduct to occur. (c) The 3rd respondent who was the [ ? d respondent's] agent had, during ait material time, been inquiring with the appellant on whether the premium had been paid. (d) The 1st respondent had not, in the plaint, pleaded acceptance o f the contract by conduct 6. The pleadings and evidence on record do not support the finding o f the learned trialJudge. When the appeal came on for hearing before us, the appellant was represented by Ms. Kyariga Nyaisa Kyariga, learned advocate. On the adversary, whereas, the 1s t respondent was represented by Mr. Shukuran Mzikila, learned advocate, the 2n d respondent had the services of Mr. Allen Peter IManyaro, learned advocate. For the 3r d respondent, in presence were Mssers. Dickson Sanga and Adolf Runyoro, learned advocates. Pursuant to rule 106 (1) and (7) of the Tanzania Court of Appeal Rules, 2009 (the Rules), counsel for the parties had earlier on filed their respective written submissions for and against the appeal. At the hearing of the appeal

counsel stood by their respective written submissions with minor additional oral submissions particularly on the 3r d ground of complaint. Having examined the record of appeal as weil as the grounds of appeal and after considering the oral and written submissions for and against the appeal, we find it convenient and befitting to determine the 3r d ground of complaint first. We think that by determining this ground first, the way forward will be dictated. In the said ground, the propriety, legitimacy and the manner the new additional issue regarding negligence was framed, is at issue. As we have alluded to earlier, after the parties had closed their respective cases, the High Court framed an additional issue which became the 2n d issue, that is, if the 1st issue is found in negative, who between the appellant, the 2n d and J d respondents should be held accountable for any negligent conduct which made the 1st respondent to suffer damages due to the non-payment o f the premium. On that ground, it is the appellants complaint that, in so framing the additional issue and by determining it, the High Court errored because the issue regarding the appellant being negligent was neither pleaded by the 1s t respondent nor were its particulars stated. In support of the said ground of complaint, it was submitted for the appellant that, the issue of negligence was not pleaded in the plaint, was raised belatedly and further that, the High Court determined it without 10

having heard the parties. In reinforcing the argument, reliance was placed on the decision of the Court in Hotel Travertine & 2 Others v. National Bank of Commerce Limited [2005] TZCA 16. It was further submitted that, the issue of the appellant being liable due to her alleged gross negligent conduct was not the 1s t respondent's case and hence the High Court ought to have confined itself within the 1s t respondent's case as pleaded in the piaint. It was emphatically argued that as it is for the parties, courts are also bound by the pleadings of the parties. To underscore the said position, Mr. Kyariga referred us to our decisions in Barclays Bank (T) Limited v. Jacob Muro [2020] TZCA 1875 and Paulina Samson Ndawavya v. Theresia Thomas Madaha [2019] TZCA 453. On what should be the way forward, it was submitted by Mr. Kyariga that, rule 38 of the Ruies has to be invoked by striking out the additional issue and nullifying the High Court's findings on the issue. It was further argued that, since the 1s t respondent's case was not proved for lack of evidence proving that there existed a contract of insurance, the suit should be dismissed. Mr. Nanyaro, for the 2n d respondent, joined hands with Mr. Kyariga. He supported the appeal on the 3r d ground of appeal arguing that the issue of negligence raised in the additional issue did not arise from the pleadings. It was further submitted by him that, the parties were not heard on the

issue of negligence. To him, the way forward should be for the matter to be remitted to the High Court either for the parties to be heard on the issue of negligence or for a re-trial. On his part, Mr. Mzikila for the 1s t respondent, had no issue with the framing of the additional issue or its determination. He submitted that the High Court properly acted under Order XIV rule 3 (a), (b) and (c) as well as rule 5 (1) and (2) of the CPC, because the issue arose from evidence. To cement his argument that issues can be framed from evidence, Mr. Mzikila placed reliance on the decision of the Court in National Microfinance Bank Pic & Another v. Lello Laurent Sawe [2024] TZCA 17. For the 3rd respondent, relying on the decision of the Court in The Registered Trustees of Arusha Muslim Union v. The Registered Trustees of National Muslim Council of Tanzania alias BAKWATA [2019] TZCA 301, it was submitted by Mr. Sanga that, the High Court had powers to frame the additional issue because the same arose from the evidence. It was also argued by Mr. Sanga that, the parties were accorded the right to be heard as the additional issue was raised and recorded in the presence of the counsel for the parties who discussed it in their respective closing submissions. 12

From the foregoing, the issue for our determination is whether, under the circumstances of the case, the additional issue on negligence which turned out to be decisive of the matter, was properly framed and dealt with by the High Court. First of all, it is common ground that under Order XIV rule 5 (1) of the CPC, the court may amend or frame additional issues at any time before passing a decree. It is stated under the said provision that: 5. -(1) The court may at any time before passing a decree amend the issues or frame additional issues on such terms as it thinks fit; and a ii such amendments or additional issues as may be necessary for determining the matter in controversy between the parties shall be so made or recorded." Generally speaking, based on the above clear position of the law, the High Court cannot be faulted for framing the additional issue in question. Though the issue was framed after the parties had closed their respective cases, it was so framed before passing the decree hence within the timeframe as per Order XIV rule 5 (1) of the CPC. That notwithstanding, since the additional issue was on negligence, the pertinent question that arises is not only whether the issue came from material propositions alleged

by the parties but most importantly is also whether the particulars of the alleged negligence were stated in the plaint. According to Order XIV rule 1 (1) and (2) of the CPC, issues arise when a material proposition of fact or law is affirmed by one party and denied by the other. Further, material propositions are those propositions of fact or law which the plaintiff must allege in order to show a right to sue or which the defendant must allege in order to constitute his defence. In the case at hand, while the additional issue was on who between the defendants should be held dccountable for any negligent conduct which made the plaintiff to suffer loss due to the non-payment o f the premium, there is nowhere in the plaint, the 1s t respondent (plaintiff) had alleged that the other parties were negligent for non-payment of the premium. It is thus clear that the additional issue did not arise from the 1s t respondent's allegations or propositions and there was, therefore, no basis for the same to be framed by the High Court. Apart from the above, since the additional issue in question introduced an issue of negligence, then particulars of the alleged negligence ought to have been stated in the plaint. The Court has restated that position in a number of its decisions including in FBME Bank Limited v. Jaet International Limited [2017] TZCA 978, where it was reiterated 14

that, in an action based on negligence, particulars of the negligence complained of, must be stated and further that, the damages sustained must also be particularized. In the said case, the commentary in Mogha's Law of Pleadings, 18th Ed., at page 79, regarding complaints on negligence arising from breach of contract or duty of care, was cited by the Court thus: "...it is necessary to state the nature o f contract broken, the circumstances in which the performance o f the contract by one party or the other was expected, the degree o f care and attention which, in the ordinary course, was expected to be shown by the parties, the circumstances under which and the reasons for which the failure to show due diligence occurred are material particulars which would be relevant before any judicial finding could be given on the plea o f negligence." Since the 1st respondent's cause of action was not founded on negligence and as negligence was neither pleaded by the 1s t respondent in his plaint nor were its particulars stated, the High Court erred in framing the additional issue. In that regard, even the argument by Messrs. Mzikila and Sanga that the issue arose from the evidence holds no water. 15

It is also our considered view that, since according to his pleadings, particularly in paragraph 5 of the plaint, the 1s t respondent's case was solely based on breach of insurance contract, framing the additional issue on negligence which was based on breach of the IPFA for non-payment of premium was, in effect, an introduction of a new case. It is our further observation that, based on the facts and the evidence on record, there were two causes of action available to the 1s t respondent. The first was on breach of insurance contract and the second was on breach of the IPFA. As the 1s t respondent opted to pursue his case on breach of the insurance contract, he was bound by his relevant pleadings on that cause of action and the High Court ought not to have framed the additional issue which had an effect not only of straying from the 1s t respondent's case but also introducing a new case. In that regard, in the case of Paulina Samson Ndawavya (supra), the Court stated that: The other remark which we find ourseives compelled to make relates to pleadings. In doing so we cannot do better than reiterate what we said in James Funke Gwagifo vs. Attorney General [2004] TLR 161 whereby we underscored the function ofpleadings being to put notice o f the case which the opponent has to make lest he is taken by surprise. From that same decision we reiterated another equally important principle o f law that 16

parties are bound by their own pleadings and that no party should be allowed to depart from his pleadings thereby changing his case from which he had originally pleaded." Furthermore, in the case of Barclays Bank (T) Ltd (supra), the Court cited with approval a passage in an article by Sir Jack I.H. Jacob titled " The PresentImportance o fPleading^' published in Current Legal Problems (1950) at page 174, where, apart from insisting that each party is bound by his own pleadings, it was also stated that, even the court is bound by the pleadings of the parties. The passage goes thus: "For the sake o f certainty and finality, each party is bound by his own pleadings and cannot be allowed to raise a different or fresh case without due amendmentproperly made. Each party thus knows the case he has to meet and cannot be taken by surprise at the trial. The court itself is as bound by the pleadings o f the parties as they are themselves. It is no part o f the duty o f the court to enter upon any inquiry into the case before it other than to adjudicate upon the specific matters in dispute which the parties themselves have raised by the pleadings . Indeed, the court would be acting contrary to its own character and nature if it were to pronounce any claim or defence not made by the parties. To 17

do so would be to enter upon the realm o f speculation." [Emphasis added] Again, in the case of The Registered Trustees of Roman Catholic Archdiocese of Dar es Salaam v. Sophia Kamani [2017] TZCA 381, the Court was faced with more or similar situation, where, on appeal, the High Court raised and disposed of the appeal onan issueof fraud which was not pleaded in the pleadings. In its decision onthat matter, the Court stated that: In civil litigations, it is through pleadings where parties establish their cases they intend to prove. So, it is the duty o f the parties to the case to clearly and categorically establish their cases before adjudication. In that context therefore, pleadings are road map so to say to any given civil litigation which should show the destination the parties to the case intended to reach (Terminus a quo, terminus ad quem)." The Court went further and stated that: ” ... the approach taken by the learned Judge is not proper. In actual fact the learned Judge took upon herself to amend the basis o f the cause o f action without application from the respondent In our teg&! system it is the responsibility o f the parties 18

and not anyone else to set the agenda for the trial by their pleadings . " Guided by the above sated position, we are settled in our minds that framing the additional issue in question was irregular. The issue did not arise from the pleadings and in effect, by framing it, the High Court introduced a new case on negligence for the 1s t respondent. The worst part of it is the fact that the issue turned out to be decisive shouldering all liabilities on the appellant. Had the High Court properly directed its mind to the fact that the new additional issue was introducing a new case not pleaded by the 1s t respondent, it would not have framed it in that manner. The High Court would also not have determined the said issue and decided the matter based on it without even having heard the parties on it first. In so doing the High Court denied the parties their right to be heard which is not only unconstitutional but also a breach of one of the cardinal principles of natural justice. As the Court held in Mbeya-Rukwa Autoparts and Transport Limited v. Jestina George Mwakyoma [2003] T.L.R. 251, a decision reached without regard to the principles of natural justice is void and of no effect. In view of the foregoing, we find the 3r dground of appeal meritorious. The additional issue was improperly framed and was determined by the High Court in breach of the principles of natural justice. 19

Ordinarily, having found the 3r d ground of appeal which is, in itself, sufficient to dispose the appeal, meritorious, we would have ended here without belabouring on the remaining grounds of appeal. However, in consideration of the circumstances of this case, we find it imperative to consider the 6th ground of appeal on which it is complained that, the pleadings and evidence on record did not support the findings of the learned trial Judge. In support of the 6th ground of appeal it was submitted for the appellant that, while the pleadings were on breach of the insurance contract, the findings and decision by the High Court was on the appellant's being negligent which was not pleaded and on which no evidence was led to that effect. There was no response on the 6th ground of appeal from the respondents let alone from the 2n d respondent whose submission was to the effect that the evidence on record proved that there was no insurance contract due to the failure by the appellant to pay the premium to the 2n d respondent as agreed by the parties to the IPFA. In essence, the appellant's complaint in the 6th ground of appeal is whether, in the absence of the new additional issue and based on the evidence on record, the 1s t respondent managed to prove his case as pleaded in the plaint. Undoubtedly, the complaint invites us to invoke our powers under rule 36 (1) (a) of the Rules, which states that: 20

” 36. -(1) On any appeal from a decision o f the High Court or Tribunal acting in the exercise o f its originaljurisdiction, the Court may- (a) re-appraise the evidence and draw inferences o f fact; Upon invocation of the above provision and having examined the evidence on record, it is our view that, the 1s t respondent's case which was on breach of insurance contract was not proved. It is clear from the evidence on record that, the 1s t respondent who had the burden of proof failed to discharge his duty in terms of section 110 of the Evidence Act. In the first place and most importantly, he failed to prove that an insurance contract existed and further that his two motor vehicles were covered by insurance. As alluded to earlier, since, according to paragraph 5 of the plaint, the basis of the 1s t respondent's claims was on insurance contract, his primary duty was to prove the existence of such contract which he failed. There is evidence in abundance showing not only that the required premium was not paid to the 2n d respondent but also that no motor vehicle insurance policy was issued by the 2n d respondent so as to create an insurance contract between the 1s t and 2n d respondents. The fact that the 1s t respondent failed to prove his suit is also evident and can be inferred from the High Court's move in framing the additional

issue after the parties had closed their respective cases. The manner the additional issue was framed suggest that it was so framed after the High Court had formed its mind that, the 1s t respondent had failed to prove his case based on breach of insurance contract. It is our settled view that, instead of introducing the new case by framing the additional issue, the High Court ought to have determined the case on the basis of the earlier framed issues and the evidence adduced. It is a settled law that court's decisions must be based on pleadings and issues framed for determination. See- Tabora Municipal Council & 2 Others v. Kasea Kisanji & 39 Others [2024] TZCA 474. The 6th ground of appeal is thus meritorious. Picking from our determination of the 3r d ground of appeal, it is our finding that, based on the pleadings and the evidence on record, the High Court ought to have not based its decision on the improperly added issue in deciding that the appellant was grossly negligent hence liable for the damages suffered by the 1s t respondent. Instead, the High Court ought to have found that, from the evidence on record, which was to the effect that there existed no insurance contract, the 1s t respondent's claim had no basis and his suit was not proved. That being the case, the High Court ought to have dismissed the suit for not being proved, which we hereby do. 22

In the final analysis, for the above given reasons, we allow the appeal and given the circumstances of the case, we make no order as to costs. DATED at DODOMA this 25th day of August, 2025 L. J. S. MWANDAMBO JUSTICE OF APPEAL A. M. MWAMPASHI JUSTICE OF APPEAL A. Z. MGEYEKWA JUSTICE OF APPEAL The Judgment delivered this 25th day of August, 2025 in presence of Mr. Kyariga Nyaisa Kyariga, learned counsel for the appellant, Mr. Alexander Mzikila holding brief for Mr. Shukran Mzikila, learned counsel for the 1s t Respondent, Mr. Allen Peter Nanyaro counsel for the 2n d Respondent and Mr. Dickson Sanga, learned counsel for the 3rd Respondent via virtual Court is hereby certified as a true copy of the original. D. R. LYIMO DEPUTY REGISTRAR COURT OF APPEAL